How can SMEs save money by investing in sustainability?
Harriet: It’s a great question. I think sustainability is often seen as synonymous with being more expensive.
Oh gosh I've to spend all this money, I need to invest, I need to do this, I need to that.’
I absolutely understand why that is a myth that's out there, but I completely disagree and I’ll unpack what I mean by that..
So for small businesses in particular, this can be a real challenge. The resources required for things like your data gathering, your emissions reporting, even engaging experts to support (like in the Wadi community) can come with a cost.
We’re seeing really, really quickly that larger companies are having to do this as a result of regulations. There's regulations changing all the time, it's a complete alphabet soup. Most of these aren't yet impacting SMEs; but SMEs sit within the supply chains so they're being asked to do it by their big clients. I've worked with lots of companies like this who’ve never touched sustainability at all, beyond trying to recycle and the normal good stuff. They’re now being asked for full suites of reports that they just haven't provided before. I think we're very quickly going to see suppliers who fail to demonstrate they can do this stuff and set a clear strategy - they will lose business.
So irrespective of the amount that you might need to invest in this sort of initial project and to get your strategy in order, it is going to pale in comparison to losing the business across your entire supply chain.
I'd say that in the first instance (but on a more practical level) where you've got things like investment in upgrading technology and need to upgrade for example to LEDs within your site or install solar panels or EV chargers for your team at work, whatever the sort of upgrades might need to be. Then yes, there's an initial cost associated with that absolutely - but your return on investment is going to be massive (1) because it's energy saving but (2) because, as and when the government decides, which they will likely do, to introduce carbon tax or we have to set carbon prices or whatever the mechanism looks like, very quickly those costs are covered.
So I think anything that small businesses can do now, is only going to save money in the long term. We also forget, that the whole concept of sustainability gets bounced around and it gets pulled into all these different these different terms, but in essence it's about:
How do we sustain our businesses in the long term?
How do we continue to operate?
And a lot this stuff isn't even about having to spend money on upgraded tech, it's just about getting your processes right and building efficiency.
A lot of the time you're going to end up saving a huge amount of money by cutting things out of your processes. So I do agree, the point about cost is so interesting, but for me, it's a no-brainer for SMEs at this stage, to really invest in some of this stuff, because you're going to see the benefit in in the medium (not the long) term.